YOUR CART

Whenever I get a paycheck for a large amount, it seems like it will last me forever. Then I go to the grocery store. And CVS. And out to dinner. And then accidentally stop in at Bergdorf Goodman and buy a new purse. Whatever, that's off topic. Pretty soon, that paycheck is dwindling down to the nubs. Has a dollar always only been 100 cents? I swear my parents credit card used to get me a lot further ;)

So how do you 1) keep that paycheck tighter to the vest and 2) maybe even, dare I say, make some money off of it? Oh yeah, I'm talkin' investments. Real adulting going on right here.

There are a few options but the good thing about all of these is that your money is not going to be accessible to you, therefore the temptation of a new handbag will be out of the picture.

If you want to just start easy, the best way to keep your paws off your cash and make some money is to put your cash in a savings account. Now, currently we live in a world of incredibly low interest rates (even negative rates in some cases.) Basically, when your money sits in a checking account, it makes no interest because that money is readily accessible to you. The reason why you "make" money when your cash sits in a savings account is because you are allowing others to borrow. It's not as blatant as your bank saying "hey, can we lend your money out to Jim since you don't need it right now?" But that basically is what happens.

Also, just like lending money to a friend, you're probably thinking "well, what if they don't pay my money back to the bank." No worries there either. All of your accounts up to $250,000 are insured by the FDIC (Federal Deposit Insurance Corporation.)

Something a little more advanced than just transferring money from your checking to savings is getting into the stock and bond market. Now, the bond market is more complex to detail in this post but essentially, you make money on a bond via an interest rate as well. In the stock market, you can make money 2 ways: a capital gain and dividends (if you're interested in more on bonds check out thebook as it is all detailed.)

Capital Gain. This is the main money maker people think about when pondering the stock market. Let's say you bought 10 shares of a publicly traded company, Apple for instance. Apple (AAPL) trades currently at about $116 a share on the NASDAQ (a stock exchange), so these 10 shares cost you $1,160. Let's assume in 1 year, Apple's stock price is now $135 and you decide to sell for a total of $1,350. You would have a capital gain of $190. You also need to consider the chance the stock price could go down, leaving you with a capital loss.

Dividends. These are not offered on all stocks. A dividend is a sum of money paid to company stockholders (usually quarterly.) For example, in April, Apple had a dividend of $.57/per share. In order to show this, we will assume we own 100 shares. Each quarter (4 times a year,) for as long as you are an owner of the stock, you will be paid $.57/share, which is $57. That doesn't seem like much in the grand scheme of things but with the more shares of a stock you own, the more you will be paid.

This is just wading into the world of investments and I'm sure some of you are looking at this post with a face similar to Nicki's. It can be frustrating to watch your bank account just get lower and lower and this may seem confusing. However, by starting to think about tucking some of your earnings away either just in the form of savings or getting into investing, you will be setting yourself up for a more financially successful future.